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Are Some Degrees Worth More than Others? Evidence from college admission cutoffs in Chile

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  • Justine S. Hastings
  • Christopher A. Neilson
  • Seth D. Zimmerman

Abstract

Understanding how returns to higher education vary across degree programs is critical for effective higher education policy. Yet there is little evidence as to whether all degrees improve labor market outcomes, and whether they do so for students from different types of backgrounds. We combine administrative and archival data from Chile with score-based admissions rules at more than 1,100 degree programs to study how the long-run earnings effects of college admission depend on selectivity, field of study, and student characteristics. Our data link admissions outcomes for 30 cohorts of college applicants to administrative records of labor market outcomes up to 30 years post-application. We estimate regression discontinuity specifications for each degree, and describe how threshold-crossing effects vary by degree type. In addition, we use variation in admissions outcomes driven by threshold-crossing to estimate a simple model that maps our discontinuity estimates into causal effects of admission by degree. Observed choice and survey data indicate that the assumptions underlying this model are consistent with student behavior. We find that returns are heterogeneous, with large, positive returns to highly selective degrees and degrees in health, science, and social science fields. Returns to selectivity do not vary by student socioeconomic status. Our findings suggest a role for policies that guide students toward higher-return degrees, such as targeted loans and better college preparation for students from low-income backgrounds.

Suggested Citation

  • Justine S. Hastings & Christopher A. Neilson & Seth D. Zimmerman, 2013. "Are Some Degrees Worth More than Others? Evidence from college admission cutoffs in Chile," NBER Working Papers 19241, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19241 Note: CH DEV ED LS PE
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    Cited by:

    1. Jorge Rodríguez & Sergio Urzúa & Loreto Reyes, 2016. "Heterogeneous Economic Returns to Post-Secondary Degrees: Evidence from Chile," Journal of Human Resources, University of Wisconsin Press, vol. 51(2), pages 416-460.
    2. Lars Kirkebøen & Edwin Leuven & Magne Mogstad, 2014. "Field of Study, Earnings, and Self-Selection," NBER Working Papers 20816, National Bureau of Economic Research, Inc.
    3. Rodney J. Andrews & Scott A. Imberman & Michael F. Lovenheim, 2017. "Risky Business? The Effect of Majoring in Business on Earnings and Educational Attainment," NBER Working Papers 23575, National Bureau of Economic Research, Inc.
    4. Nordin , Martin & Heckley , Gawain & Gerdtham , Ulf-G, 2017. "Impact of a Tertiary Eligibility Threshold on Tertiary Education and Earnings: A Discontinuity Approach," Working Papers 2017:12, Lund University, Department of Economics.
    5. Joseph G. Altonji & Seth D. Zimmerman, 2017. "The Costs of and Net Returns to College Major," NBER Chapters,in: Productivity in Higher Education National Bureau of Economic Research, Inc.
    6. Berlingieri, Francesco & Zierahn, Ulrich, 2014. "Field of study, qualification mismatch, and wages: Does sorting matter?," ZEW Discussion Papers 14-076, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    7. Fack, Gabrielle & Grenet, Julien & He, Yinghua, 2015. "Beyond Truth-Telling: Preference Estimation with Centralized School Choice," CEPR Discussion Papers 10907, C.E.P.R. Discussion Papers.
    8. Raj Chetty & John N. Friedman & Emmanuel Saez & Nicholas Turner & Danny Yagan, 2017. "Mobility Report Cards: The Role of Colleges in Intergenerational Mobility," Working Papers 2017-059, Human Capital and Economic Opportunity Working Group.
    9. Bordon, Paola & Fu, Chao, 2015. "College-Major Choice to College-Then-Major Choice," MPRA Paper 79643, University Library of Munich, Germany.
    10. Justine Hastings & Christopher A. Neilson & Seth D. Zimmerman, 2015. "The Effects of Earnings Disclosure on College Enrollment Decisions," NBER Working Papers 21300, National Bureau of Economic Research, Inc.
    11. Joshua Goodman, 2017. "The Labor of Division: Returns to Compulsory High School Math Coursework," NBER Working Papers 23063, National Bureau of Economic Research, Inc.
    12. Fack, Gabrielle & Grenet, Julien & He, Yinghua, 2015. "Beyond Truth-Telling: Preference Estimation with Centralized School Choice and College Admissions," TSE Working Papers 15-607, Toulouse School of Economics (TSE), revised Sep 2017.
    13. repec:hal:cesptp:halshs-01215998 is not listed on IDEAS
    14. Hastings, Justine S. & Neilson, Christopher A. & Ramirez, Anely & Zimmerman, Seth D., 2016. "(Un)informed college and major choice: Evidence from linked survey and administrative data," Economics of Education Review, Elsevier, vol. 51(C), pages 136-151.
    15. Blom, Erica & Cadena, Brian C. & Keys, Benjamin J., 2015. "Investment over the Business Cycle: Insights from College Major Choice," IZA Discussion Papers 9167, Institute for the Study of Labor (IZA).
    16. Machado, Cecilia & Szerman, Christiane, 2016. "Centralized Admission and the Student-College Match," IZA Discussion Papers 10251, Institute for the Study of Labor (IZA).
    17. Joseph G. Altonji & Peter Arcidiacono & Arnaud Maurel, 2015. "The Analysis of Field Choice in College and Graduate School: Determinants and Wage Effects," NBER Working Papers 21655, National Bureau of Economic Research, Inc.
    18. Atila Abdulkadiroglu & Joshua D. Angrist & Yusuke Narita & Parag A. Pathak, 2017. "Impact Evaluation in Matching Markets with General Tie-Breaking," NBER Working Papers 24172, National Bureau of Economic Research, Inc.
    19. Evan Riehl & Juan E. Saavedra & Miguel Urquiola, 2018. "Learning and Earning: An Approximation to College Value Added in Two Dimensions," NBER Chapters,in: Productivity in Higher Education National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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